PetroGlobe Inc.

PetroGlobe Inc.

May 01, 2007 20:43 ET

CORRECTION FROM SOURCE: PetroGlobe Inc. Announces Filing of 2006 Annual Disclosure Documents, Highlights 2006 Annual Results and Updates Result From Operations

Year End and National Instrument 51-101 Filings

CALGARY, ALBERTA--(CCNMatthews - May 1, 2007) -

Some minor revisions have been made to the release issued at 20:28 PM ET April 30, 2007. The complete and corrected release follows.

PetroGlobe Inc. ("PetroGlobe" or the "Corporation") (TSX VENTURE:PGB), announces that it has filed with Canadian securities regulatory authorities its audited financial statements for the year ended December 31, 2006, the accompanying Management's Discussion and Analysis and the Corporation's Statement of Reserves Data and Other Oil and Gas Information (National Instrument Forms 51-101F1, 51-101F2 and 51-101F3). These filings are available for review under the Corporation's SEDAR profile at

2006 Year End

PetroGlobe increased its Alberta producing well count from one to seven in 2006, with six new operated wells in west-central Alberta being brought on stream.

The Corporation also commenced construction, and substantially completed, a wholly owned gas trunk line in the Pembina Area of Alberta, which is needed to provide necessary infrastructure for gas transmission.

Total revenue increased by 14% to $9.2 million for 2006. Operating expenses were up 11% to $7.7 million for the year, reflecting an increase in consulting costs directly associated with an increase in revenue and a substantial expansion of oil and gas activities.

PetroGlobe had a loss of $6.0 million in 2006, compared with a loss of $0.5 million in 2005, due primarily to ceiling test impairment in Alberta of $3.5 million and impairment of an unproven property in Texas of $0.8 million. It is not uncommon for an exploration company to be faced with ceiling test impairments when it incurs significant capital expenditures, but does not yet have sufficient production on stream to meet the requirement of the test. The impairment on unproven properties includes PetroGlobe's working interest share of drilling and completion costs on a non-operated well in Texas. Loss per basic and diluted share was $0.22 in 2006, compared with a loss of $0.03 in 2005.

"Although 2006 presented challenges for us in terms of getting wells tied-in and producing in Alberta, we did exit the year with good momentum. We also continued our Texas drilling and evaluation program which is showing encouraging results" said Clifford D. Johnson, Q.C., Chairman and Chief Executive Officer of the Corporation.

Operations Update


Since year-end 2006, the trunk line in Alberta has been completed. The pipeline is generating tariff revenue from co-venturers and may also be made available to other operators in the area. The pipeline is a new source of potential revenue for the Corporation.

An additional 16 wells have been tied-in since end of the year. Of the 22 wells now tied-in 14 are producing. The Corporation plans to tie-in an additional five wells in the near future after engineering work is completed. The remaining 19 wells in inventory will be evaluated for production capability in conjunction with engineering and economic evaluation work being undertaken over the next several months to determine future plans for the area.

Alberta gas production is currently averaging 3.1 million cubic feet per day ('MMcf/d") gross or 517 barrels of oil equivalent per day ("BOE/d"), with the net to PetroGlobe being 1.3 MMcf/d or 217 BOE/d.


PetroGlobe's wholly owned U.S. based subsidiary, PetroGlobe Energy USA Ltd. ("PetroGlobe Energy") expects in May or June to complete the four-mile gas pipeline now under construction to connect the McIntosh #1-77 gas well, and potentially other gas wells in the area, to the Atmos sales line.

PetroGlobe Energy is also conducting in-depth engineering and economic evaluations of its Texas properties, taking into account the five operated wells in inventory, and other wells previously drilled in the Palo Duro basin, which will be carried out over the next several months. These evaluations, similar to the studies planned for Alberta, will help define future plans for exploration and development of the Texas properties.


Once engineering and economic evaluation work for both Alberta and Texas are completed, more definitive plans and budgets for the remainder of 2007 and 2008 will be finalized. Financing arrangements will be necessary to execute the developed plans and will be included as part of the planning and implementation process.

About PetroGlobe Inc.

PetroGlobe Inc. is listed on the TSX Venture Exchange and trades under the symbol PGB. There are 33.1 million shares outstanding. The 52-week range is $1.00 - $2.95. The market cap is $51.3 million based on the closing price of $1.55 on April 30, 2007.

PetroGlobe Inc. carries on business directly in Canada, and indirectly in the United States through its wholly owned subsidiary PetroGlobe Energy USA Ltd. Its other wholly owned subsidiary, PetroGlobe (Canada) Ltd., is in the business of international oil and gas consulting.

Major properties are in the Palo Duro basin of West Texas and the Cynthia, Drayton Valley, Breton, Warburg and Leduc areas of west-central Alberta.

This press release may contain forward-looking statements, including expectations of future production, cash flow and earnings. These statements are based on current expectations that involve a number of risks and uncertainties, which could cause actual results to differ from those anticipated. These include but are not limited to operational risks in development, exploration and production, delays or changes in plans with respect to exploration or development projects or capital expenditures, the uncertainty of reserve estimates and of estimates and projections relating to production costs, health, safety and environmental matters, commodity price, price and exchange rate fluctuation and uncertainties resulting from potential delays or changes in plans related to exploration or development projects or capital expenditures. Additional information on these and other factors that could affect PetroGlobe's operations or financial results are included in the company's reports filed with Canadian securities regulatory authorities.

Production information is commonly reported in barrels of oil equivalent ("BOE"), which are based on conversion of natural gas to oil at six thousand cubic feet per barrel (6 Mcf:1 bbl). BOE may be misleading, particularly when used in isolation, since the 6 Mcf:1 bbl ratio is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

This press release should not be construed to be a solicitation for the purchase of the corporation's common shares.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • PetroGlobe Inc.
    Clifford D. Johnson, Q.C.
    Chairman & Chief Executive Officer
    (403) 265-4488 ext. 226
    (403) 265-9727 (FAX)
    PetroGlobe Inc.
    Jason E. James
    Chief Financial Officer
    (403) 265-4488 ext.234
    (403) 265-9727 (FAX)